{"id":1780,"date":"2013-06-29T06:16:02","date_gmt":"2013-06-29T12:16:02","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=1780"},"modified":"2013-06-26T10:16:21","modified_gmt":"2013-06-26T16:16:21","slug":"sb-254a-and-oregons-cmgc-rules-are-overblown","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/sb-254a-and-oregons-cmgc-rules-are-overblown\/","title":{"rendered":"SB 254A and Oregon’s CMGC Rules Are Overblown"},"content":{"rendered":"

Eric A. Grasberger – June 13, 2013<\/p>\n

Oregon Senate Bill 254A and the CMGC method generally garner more attention than is justified.\u00a0Here is the background.<\/p>\n

On a typical non-CMGC project, the general contractor will bid on a complete or nearly complete set of design documents.\u00a0This is referred to as \u201cdesign-bid-build.\u201d\u00a0In public construction, competitive bidding is required by statute to reduce expenditure of taxpayer funds.\u00a0In the CMGC method, rather than awaiting a complete design, the contractor is chosen early and asked to (1)\u00a0review the developing design of the architects and engineers, and (2)\u00a0perform certain other planning and organizational work that theoretically benefits the project.\u00a0The \u201cearly\u201d work is generally considered the \u201cCM\u201d portion of the CMGC scope, while the post-bid or post-GMP (guaranteed maximum price) work is generally considered the \u201cGC\u201d portion.<\/p>\n

What is so different about this process?\u00a0Not much, really, but there are a couple of considerations that differ from traditional design-bid-build.\u00a0First, because the CMGC is chosen before design is complete, the CMGC is not able to provide concrete pricing at the time it is selected; by the time the design is sufficiently complete to allow pricing, the CMGC has already been chosen.\u00a0Critics argue (accurately) that this dynamic puts more leverage in the hands of the CMGC during price negotiations because the owner has now invested time and CM dollars in the CMGC and probably does not want to manage a second-round selection process to get a new contractor if the original CMGC\u2019s price is not competitive.\u00a0While this poses a theoretical problem for owners, the CMGC provides its percentage fee (markup) at the time of selection and is required to competitively bid all subcontractor work, reducing if not eliminating the concerns over cost control and negotiating leverage.<\/p>\n

Second, a CMGC is selected not by competitive low bidding (as in design-bid-build), but by a\u00a0subjective scoring process of many other factors including experience and personnel.\u00a0Many in the industry criticize this subjectivity as causing favoritism, cronyism, and \u201cbeauty contests\u201d that do not lead to the best project for the best value.<\/p>\n

Not every project can use the CMGC process.\u00a0It is typically reserved for larger, more complex projects that justify consideration of factors other than price and which beg for early involvement of the general contractor.\u00a0The current restrictions on use of CMGC are reasonable and, in my experience, generally followed by public agencies.\u00a0Despite the simplicity of the method and the existence of detailed statutes and regulations governing its use, the industry has needlessly tussled over CMGC for many years, and public owners have sought out highly paid \u201cexperts\u201d in CMGC when in reality it is not substantively different from traditional project delivery methods.<\/p>\n

I doubt the new legislation will make any significant difference in the frequency or effectiveness of CMGC in Oregon.\u00a0It will continue to be a popular delivery method on the larger projects, and the better-known, more experienced contractors will continue their success in landing these projects.<\/p>\n

via SB 254A and Oregon’s CMGC rules are overblown – Lexology<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Eric A. Grasberger – June 13, 2013 Oregon Senate Bill 254A and the CMGC method generally garner more attention than is justified.\u00a0Here is the background. On a typical non-CMGC project, the general contractor will bid on a complete or nearly complete set of design documents.\u00a0This is referred to as \u201cdesign-bid-build.\u201d\u00a0In public construction, competitive bidding is… Continue reading SB 254A and Oregon’s CMGC Rules Are Overblown<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[333,367,75,321],"class_list":["post-1780","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-architects","tag-construction-management","tag-engineer","tag-general-contractor","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nSB 254A and Oregon's CMGC Rules Are Overblown - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/sb-254a-and-oregons-cmgc-rules-are-overblown\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SB 254A and Oregon's CMGC Rules Are Overblown - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Eric A. Grasberger – June 13, 2013 Oregon Senate Bill 254A and the CMGC method generally garner more attention than is justified.\u00a0Here is the background. 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Grasberger – June 13, 2013 Oregon Senate Bill 254A and the CMGC method generally garner more attention than is justified.\u00a0Here is the background. 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